FORT SMITH, Ark. — The Fort Smith Board of Directors on Tuesday (Jan. 19) unanimously repealed an ordinance passed in December that would double the city’s supplemental alcohol tax on private clubs.
The board approved an ordinance to raise the supplemental alcohol tax on private clubs Dec. 17 by a vote of five to two with Directors George Catsavis and Neal Martin voting against the ordinance. Private clubs are already charged a 5% supplemental tax on alcohol sold in the club. This is on top of the 9.75% sales tax in the city. The ordinance will raise that to 10%, but because of an amendment, is not set to go into effect Dec. 1. Private clubs also must pay a permit fee, according to the ordinance.
The original ordinance to collect a supplemental alcohol tax was enacted in 1969. The increase in the alcohol sales tax is expected to raise about $500,000 annually, said Andy Richards, finance director for the city. The current 5% supplemental tax typically brings in $525,000 in annual revenue. In a memo explaining the agenda item from Deputy City Administrator Jeff Dingman said the increase in the tax was to be a “means of augmenting General Fund revenues to fund city operations in the FY2021 budget.”
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